US cable TV giant Comcast has made a £22.1bn bid for Sky, challenging an existing offer from 21st Century Fox.
Rupert Murdoch’s 21st Century Fox had already agreed an £18.5bn deal to buy the 61% of Sky it does not already own.
Comcast is the biggest US cable TV firm.
It also owns the broadcast TV network NBC and Universal Pictures.
Comcast chief executive Brian Roberts called Sky "an outstanding company" and said he was "confident" the offer would be cleared by regulators.
Mr Roberts added: "We would like to own the whole of Sky and we will be looking to acquire over 50% of the Sky shares".
Comcast said its bid of £12.50 a share was 16% higher than the 21st Century Fox offer.
Sky's shares were up more than 21% at above £13 in afternoon trading on the London Stock Exchange.
Why does Comcast want to buy Sky?
Analysts from Liberum say there is "a strong rationale" for Comcast to buy Sky as it would give it immediate leading positions in pay-TV markets in the UK, Germany and Italy, as well as a presence in Spain.
Comcast already has NBC Universal film and TV assets, but the deal "would give it a very powerful distribution pan-European network," Liberum said.
Earlier this month, Sky won the lion's share of Premier League TV rights for the football seasons between 2019 and 2022.
Comcast chief financial officer Michael Cavanagh said the Premier League auction was a factor, but not the driving force behind the offer.
Liberum said the lower price for the Premier League TV rights contract had taken out the risks of price inflation.
BBC media editor Amol Rajan says Comcast's bid looks unlikely to face the same regulatory hurdles as Fox's push for full control, "since media plurality, commitment to broadcasting standards, and the political heat around the name Murdoch do not arise".
In making its offer, Comcast said Sky News was "an invaluable part of the UK news landscape", and it intended to "maintain Sky News' existing brand and culture".
The Liberum analysts said there was a "very good chance" that Comcast's bid would succeed.
Neither Fox nor Disney will want to get into a bidding war, "especially given the [regulatory] complications surrounding Sky News", they said.
The UK government may also be looking for a way to defuse the political risks from the Fox bid, they added.
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